Sunday, 12 February 2012

Despite the growth of viable businesses in the online
video sphere, there remain significant threats to a long-term future for the
provision of legal feature-length content. Chief among these threats is that
of piracy, which existed before the establishment of legal alternatives and
remains a consistent threat to legal business models. However, there are a
number of other factors which threaten to undermine the establishment and
development of online video. Some of these threats are intrinsic to the
business of media distribution and are not directly related to the online sphere;
although the nature of internet delivery may contribute to the shape these
threats ultimately take. Such issues are primarily those of rights – whether
the rights of film makers to be compensated for their efforts or the right of
distributors to be rewarded for developing and bringing works to market. Other
threats come from the nature of the internet itself – concerns over the
stability and security of open networks and the expense and logistics of
support which internet video companies must provide to end-users. There are
also a number of factors which are intrinsic to local markets – matters of
legislation which remind us that media distribution is dependent on a complex
framework of national laws and regulations, regardless of the global nature of
the internet itself. Thus, this section will include an examination of the
impact that UK law has had on the development of the internet video market.

Piracy

There can be little doubt that piracy is one of the
greatest threats to the legal distribution of media content in general and this
holds true for online businesses, perhaps to an even greater extent. The ease
with which digital content can be replicated, without loss of quality, and the
multitude of ways in which it can be transferred over the internet -
practically without expense – is a major problem for the industry. For example,
Netflix's planned expansion into the Spanish market is seen as a key test in a
territory where piracy is rife:

... Spain could pose more of a challenge given the high levels of piracy
and unemployment... Apple Inc.'s iTunes Store doesn't sell movies and TV shows
in Spain. The Spanish roll-out is seen as a test of whether people used to
watching movies at home for free will pay about 6 Euros a month for content of
a higher quality and easier to find than on piracy websites.[1]

It's interesting at this
point, however, to point out the way in which piracy – or, at least, the
initial application of new technology – has a disruptive effect on existing
modes of media distribution. This has been true of most home entertainment
technologies. From the earliest home film projection formats, through audio
formats like the cassette tape, to VHS and DVD, home formats have disrupted the
distribution and revenue models of studios. Though each of these formats has
proven to be enormous commercial opportunities for rights holders in the end,
their introduction has been met, time and again, with suspicion and legal
threats.

The case of VHS is
illuminating in regards to the legislative approach studios have been
undertaking in respect of online video. The Sony Corporation and its partners in
the development of the Betamax home video format was the subject of a law suit
issued by Universal and other Hollywood studios in 1981. The studios protested
that the Betamax and other VCR machines allowed users to make unauthorised
copies of copyrighted works from television broadcasts and, further, that Sony
were marketing the device for this purpose. Though the lawsuit was eventually
lost in 1984, by which time Universal had already released several of its
titles on Betamax and VHS, this illustrates the nervousness with which studios
perceived a technology which allowed individuals to control how and when they
viewed video content[2].
Though VHS recorders and now PVRs have become ubiquitous, the idea of
time-shifting was once seen as deeply threatening to an industry which wished
to preserve the established theatrical and television release windows.

In the same way, studios now look on with trepidation
to a truly on-demand viewing experience in the online sphere, where users not
only want to view any content whenever they want to, but wherever
they want to view it – be it on multiple devices in the home or on the move.
Many viewers have turned to peer-to-peer and other file distribution services
to obtain copies of films which have been released in other territories,
showing disregard not only to rights holders but – crucially – to the studio's
cherished distribution patterns and release windows. The global nature of news
media ensures that publicity for a major release spreads into other territories
sometimes well-ahead of a traditional staggered release and creates a demand
which is filled by forms of piracy which are often simple (ease of use) and
reliable (no loss of quality). Though
the film industry continues to characterise film piracy as stemming from
clandestine filming of theatrical screenings[3],
a large proportion of files exchanged online are taken from DVD rips – often
from screener copies sent for review by journalists. As such, they are almost
perfect copies of the originals: most modest computers can use free software to
remove DVD encryption and re-encode the resultant files to a format which is
smaller and easier to transfer over the internet, whilst retaining the
resolution and bit rate of the original[4].
It is no longer the case, as with analogue formats such as VHS that copies of
video content must be of inferior quality to the original.

In addition, the files which are ripped from DVD or
other sources can be easily transferred to other devices, such that a viewer
can choose to watch a film at home or on a portable player while travelling.
Parents, for example, can easily transfer a child's DVD for playback on a
portable games console to entertain them on long car journeys. The industry's
attempts in the sphere of portability have, to date, proven to be
embarrassingly inflexible and unappealing. At present, several studios have
marketed DVD and bluray releases of feature films with “digital copies” on the
same disc. Consumers can transfer these files to portable players. In reality,
such files have proven to have DRM systems which place heavy limits on how
consumers can digital copies. There have been restrictions on the amount of
times the file can be transferred from disc, the types of devices allowed for
transfer and the timescale within which transferred files must be watched. The
same types of restrictive systems are in place for download services such as
iTunes, for both film rentals and for outright purchase. Combined with outdated
pricing models, consumers have had a right to ask why there should be any
restrictions on what they do with digital files when they have paid the same
price as for more portable and flexible formats such as DVD.

Availability of Content Rights

Of course, studios argue that such restrictions are
necessary to protect rights of ownership and to ensure that filmmakers can be
properly compensated for their work. It is argued that DRM is necessary to
prevent the mass, unregulated exchange of film titles on digital formats,
especially given the ease with which such activity can take place. Such
arguments would seem to be self-evidently true, given the widespread piracy
that is taking place and the success of some online video portals that operate
using DRM. The example of Apple's iStore, which sells film and TV content for
rental or outright purchase, is perhaps a telling one. Despite all content
being protected with DRM which heavily restricts what the consumer can do with
individual files, iTunes has around two-third of the total US market for VoD
titles[5].
Other portals which provide access to film titles, such as Sony's Qriocity
service and Acetrax's movie-on-demand portal for Samsung Smart Televisions are
also proving commercially successful, whilst selling files with DRM
restrictions.

In the case of subscription
services like Netflix, where video is streamed to viewers rather than
transferring a complete physical file, nervousness over content rights has
manifested itself in a reluctance to allow premium titles to be licensed. Major
studios – such as those owned by the Sony Corporation – have tended to reserve
recent Blockbuster hits for portals they own and manage rather than license
them to Netflix. Rights holders have been concerned that the subscription model
– where thousands of titles are available for the same price as two paid
downloads – devalues titles and can impact other revenue streams, such as DVD
and cable pay-per-view. As a result, much of the content available on Netflix
has been viewed as “library” content – titles which tend to be older, less well-known
and well-reviewed.

In addition, as mentioned above,
studios have attempted to implement the regional release patterns of theatrical
and previous home viewing formats, when issuing content to online video
portals. This leads to a situation where websites and services which operate
internationally have to present different front-ends to users in each
territory. Online video services also have been struggling against illegal
downloads, where such territorial boundaries are only restricted by language
and all titles are easily available on the date of initial release. Film
studios remain content to preserve these restrictions while there is substantial
revenue from physical formats such as DVD and bluray.

Ease-of-Use Issues

Compared to previous home
viewing formats, online video has a usability problem. With VHS and DVD all
that is required is to insert the tape or disc, in most cases you won’t even
have to press “Play” or change the channel on the television. In comparison,
online video has necessarily been developed on the PC platform, which has
several disadvantages as a platform for viewing feature-length entertainment:

The PC is not a communal machine. PC
stands for “personal” computer and despite the fall in cost of large
monitors, computers tend to be used by individuals rather than groups.
Home entertainment – especially feature film – tends to be viewed by
couples and families.

PCs also tend not to be located in the
lounge or family room, where the majority of home video is watched. The rise
of small laptops such as netbooks and tablet computers has meant that
browsing from the sofa has become common, but such devices are even less
communal than the standard PC.

People – or at least certain demographic
groups – are intimidated by PCs. Older people, or perhaps people in
general who are less experienced with PC usage, find computers difficult
to use[6].
Compared to inserting a DVD, the steps necessary to, for example, set up
an iTunes account, pay for, download and watch a film are complicated and
difficult to explain to someone who is not even familiar with how a mouse
operates – or who has limited experience with the internet.

Devices are emerging which have
been developed to simplify the experience of accessing online video, utilising
television-style remote controls and connections for televisions and home
cinema amplifiers, but standards for such devices are still in the process of
being defined and consumers are nervous of adopting formats which may lack
support in future.

Internet Network Stability

Another factor which negatively impacts the viability
of online video businesses is the stability of the delivery network. Video is
delivered across the open network in the form of individual packets, which may
in reality be sent across various routes and are subject to delays caused by
other unrelated traffic. Technologies are in place to buffer and sort data
packets when received by the displaying device[7],
such that the viewer experiences a smooth, interrupt-free video and audio
image, but the potential for disruption is present even on the highest speed
network connections.

In addition, as online video is an on-demand business
it is susceptible to service interruptions which have can have a major negative
effect on perception of the service. In traditional packaged media, failures in
the supply chain can delay product being delivered, but once the consumers has
received a disc she can watch it whenever she wishes to. Online video relies on
100% service availability to cater for demand which may occur at any time, day
or night. Despite developments in network hardware and software, it is
extremely rare for even mission critical web services in industries such as
finance to achieve perfect availability. Due to the open nature of the internet,
online business must be vigilant against malicious attack from viruses and
other external intrusions from hackers and criminals. The complexity of systems
required to correctly authenticate and serve potentially thousands of
concurrent customer requests introduces risk which can be difficult to manage
and can have extremely negative results when not handled correctly.

The most high-profile example of network intrusion in
the online video sphere occurred in April of 2011 when Sony's online gaming and
media store the Playstation Network was the victim of a hacking operation which
compromised the personal data of 77 million customers[8].
Due to the extremely serious legal position, Sony was forced to shut down the
entire network and enter a lengthy period of analysis, redesign and rebuild of
the network's security architecture. In the end, the system was not fully
operational until early June, an outage of some 8 weeks:

Just think of what this means from a business perspective: nearly three
months of zero revenues from the services, plus the cost of putting right the
attacks with new security measures including automated software monitoring and
configuration management to defend against new attacks ... the cost of a new
customer appreciation programme designed to thank customers for their “patience
and loyalty”... if this can happen to Sony, who can't it happen to?[9]

Sony compensated video
gamers who had been unable to play online over this period with a promotion
allowing downloads of a number of games for free.

By contrast, subscribers to video services operating
on the Playstation Network were not compensated by Sony – the corporation
arguing that such services are run by external parties over which Sony has no
control. The platforms which provide video services through Playstation Network
include Netflix, Vudu, Hulu, NBA, Mubi and Lovefilm. Each of the services is
available on other platforms (chiefly, on a PC through a web site), so
companies correctly argued that outages on the Playstation Network did not equate
to complete loss of service. However, subscribers who used the services on the
Playstation 3 game console were clearly doing so to benefit from a better user
experience than the PC could provide – namely, integration with a home
entertainment system based in the family room. To lose access to such a
service, particularly a paid subscription service, for two months was extremely
damaging to the Sony's Playstation brand, the concept of subscription video
services and the companies who provide them.

For companies providing access to video over the
internet, the number of potential links in the delivery chain between them and
their customer presents a challenge, not just in providing stable video
streams, but in supporting customers when things go wrong. Consider the
following scenario:

Having paid to stream a
feature from an online video provider, the viewer's film is paused after 20
mins and refuses to resume. The viewer is watching the film on a connected TV
over his home broadband connection. The problem could be in one or more of the
following areas:

There is a problem with the
viewer's TV. This could also be caused by a number of reasons from a
failure in the processor which decodes the video, in the software which
manages the network connection or in the network interface itself.

There may be a loose connection
between the TV and the router, or between the router and the broadband
modem.

If using wi-fi there may be a
problem with the wireless network, such as interference from another
signal.

There may be a hardware or
software fault in the viewer's broadband router or modem.

There may be a service
interruption in the viewer's boardband.

There user may not have a
sufficiently fast broadband connection to stream the video content.

There may be a problem with the
video provider's servers or network.

Self-evidently, such complexity
makes any problem difficult to diagnose. What makes this situation even worse
is that, unlike provision of ondemand video content over a cable network, no
single provider is responsible for point-to-point transfer of the data. The
viewer may have paid for a film from Blinkbox, streamed over his PlusNet
broadband connection, using a Netgear wireless router to a Playstation3 games
console, which ultimately displays the content on a Samsung TV (which he may
have purchased from John Lewis). Given such circumstances, even an individual
with a level of technical understanding of the links involved may struggle to
know how to identify which component is faulty and, ultimately, who to call for
support.

Network Infrastructure

Poor availability of high-speed
broadband in the UK is likely to hamper the development of online video. The
minimum recommended download speed for a streaming service is usually 1-2Mbps[10].
However, viewers who are restricted to speeds at this level are likely to
encounter pauses as network levels fluctuate and the player software tries to
buffer incoming packets. There are a number of server and client-side
technologies which attempt to work around problems with low-speed connections,
but the reality is that uninterrupted display of video content requires a
minimum level of regular traffic across the network. In addition, as content is
increasingly displayed on large television screens in the lounge or family room,
viewers are seeking an experience which is equivalent with HD formats on bluray
disc, broadcast, cable and satellite platforms. The minumum recommended
download speed for streaming HD video is between 8-10Mbps, which is currently
only available to 14% of UK households[11]. For
households with slow broadband speeds a better option would be to use one the
services which provides files for download, rather than streaming – such as
iPlayer desktop or iTunes. However, with download solutions the opportunity to
capitalise on impulse viewing decisions is lost. Despite the popularity of
services such as BBC's iPlayer, the vision of an online video ecosystem to
compete with broadcast television and ondemand services via cable is not
currently feasible in the UK.

Legislation

Also important to the feasibility of online video and
other media services has been the question of “net neutrality” and the legislation
which national governments have enacted to protect or compromise this notion.
Essentially, “net neutrality” is the idea that ISPs and other organisations that
enable internet traffic should treat all traffic in the same way, regardless of
origin, destination or content. This is an important concept in relation to
online video due to the large amount of traffic generated by online video
businesses. In the US, it has recently been measured that Netflix takes up some
22% of internet traffic, despite only have 25 million subscribers[12]
and – therefore a relatively small percentage of the total US internet-enabled
households. ISPs are concerned that viewers of online video are consuming a
disproportionate amount of traffic as other users, while paying the same for
their internet service package. Similarly, as companies like Netflix use the
open internet to transfer video content, they are using greater bandwidth than
other services with less traffic-intensive websites and services.

To combat this seeming inequality of usage and – they
argue – to preserve internet bandwidth for the wider use base, some ISPs have
introduced caps for individual users on certain packages. So, for example,
subscribers to plusnet's 20Mb monthly service are capped to 60 GB of traffic
(downloads + uploads) per month[13].
If users go over their monthly allowance, they are charged at a premium rate for
the extra traffic they incur. So far, these kinds of caps on home internet use
have been relatively uncontroversial. This is likely to be so because for a
number of reasons:

Consumption of
online video is a relatively new phenomenon, with many users either not
downloading or streaming at all, or in a fairly limited way.

Popular online video
sites, such as Youtube, carry a majority of short-form, low-bit rate
content, which consumes low amounts of data.

Video has – and
continues to be – viewed primarily on personal computers, laptops and
mobile devices with small screens, which doesn't incentivise viewers to
seek out higher resolution, more bandwidth-hungry video content.

All three of these
contributory factors are changing as online video business matures. To take
each in turn:

Online video
consumption has been increasing at a very steep rate in recent years,
across a number of devices. The maturity of platforms such as Netflix and
BBC iPlayer – and the range of attractive content they offer – is driving
viewing figures ever higher.

Now that people are
using catch up services, the expectation of similar – i.e. Broadcast –
quality is becoming the minimum acceptable standard for online viewing
experience. Similarly, viewers of feature film online have an expectation
of DVD quality bitrates and resolution. Some services have begun to carry
HD quality video.

The spread of online
video services to a number of devices which connect to televisions, from
games consoles to bluray players – and the emergence of so-called “smart”
TV has led to an increase in online video viewed on large screens in the
family room. Low-bit rate video looks terrible on these kinds of monitors
and, therefore, screen sizes are a direct driver for increased video
quality.

As each of these – and other factors – drives the
move to high-bit rate video ISPs have moved to protect their networks from
saturation. In addition to maximum monthly data caps, they have also introduced
“throttling” measures, with some heavy data users finding data transfer reduced
at peak-usage times (usually in the early evening). This has proven more
controversial than maximum data caps, with subscribers complaining that they do
not regularly receive advertised download speeds at times convenient for them.
Subscribers and groups which represent consumers have also consistently argued
that some ISPs are using these issues to mask profiteering – as ISPs continue
to push subscribers to more expensive, less-curtailed data packages.

In much the same as viewers have been charged for
increased data usage, ISPs and CDNs (Content Delivery Networks) have been
seeking to charge online video companies whose traffic uses large amounts of
bandwidth on their networks[14].
Though this may be seen as a simple case of economics – companies should pay
for using a greater percentage of internet traffic, in much the same way as
road haulage companies pay extra taxes for the impact they make on motorways –
in reality the issue is more complicated. Firstly, it is argued, that ISPs are
already recouping greater revenue from subscribers. When traffic increases,
subscribers graduate to more expensive data packages, so ISPs benefit
financially from services which drive traffic on the network. Secondly, many
providers of internet services have vested interest in the delivery of video.
Many internet service providers – such as Comcast in the US or Virgin and Sky
in the UK – provide broadcast television and on demand video services. In doing
so, they run the risk of a conflict of interest when it comes to Over-the-Top
video services, many of whom are striving to provide a service which competes
with traditional media outlets. As such, groups representing online video
companies have joined forces with advocates of open internet access to argue
that all internet service providers should treat traffic in an impartial manner
– neither throttling traffic from high-usage companies such as Netflix, or
being allowed to charge extra to carry the traffic to subscribers.

This lobbying has proven successful in the US. The
picture is different in the UK, where the government introduced legislation in
2010 which allows BT, the dominant telecommunications company and provider of
ADSL broadband to homes, to manage traffic in a way which throttles
high-bandwidth services where such traffic is deemed to have a negative impact
on delivery of other data[15].
The government's argument has been that allowing ISPs to potentially charge to
route certain types of high-bandwidth data will ensure the network is not
overwhelmed and will give ISPs extra revenue to continue with improvements in
the UK networks reach and capacity. While it is indisputable that the UK desperately
needs improvement in internet infrastructure, this is a controversial way to
fund improvements and has resulted in a number of high-profile figures
criticising the government's policies in this area. It remains to be seen how
the legislation will impact the development of online video businesses in the
UK and whether companies such as Lovefilm and the BBC will be charged extra by
ISPs to carry traffic to subscribers.

[3] "Anti-piracy ad promotes cinemas",
BBC News, 21 June 2005. http://news.bbc.co.uk/1/hi/entertainment/4114416.stm
. These series of ads showed pirate copies as fuzzy camcorder recordings of
threatrical screenings, complete with people standing up in front of the camera
"because there's always someone who needs to go to the loo". In reality,
most digital piracy orginates from DVD and is of good quality.

[10] Interview with Edd Uzzell. The BBC iPlayer
help site also used to recommend these speeds. This advice has recently been
replaced with a tool which can measure a user's bandwidth automatically and
recommend whether this is fast enough for iPlayer use. http://www.bbc.co.uk/iplayer/diagnostics

Sunday, 5 February 2012

What is IPTV and Internet Video?

The rapid increase in number of
households and businesses with access to fast internet connections[1], capable
of streaming of downloading compressed video content, has allowed a market to
emerge for the provisioning of video content – whether of TV, short-form or
feature-length. The popularity of short-form, user-generated video site YouTube
from its creation in 2005 has spearheaded the emergence of a multitude of services
which now provide access to all sorts of video content.

At this point it's useful to
make clear some technological distinctions between different modes of delivery
of video content over the internet. What is referred to as IPTV (Internet
Protocol Television) is a platform used by television service providers to
“deliver multiple streams of continuous content over private networks to
viewers who watch the content on normal television sets”[2]. Though
the IP protocol used is common with internet traffic, the network is not part
of the open internet. In this way, service providers have built and exploited
proprietary fiber-based networks and CDNs (Content Delivery Networks) to avoid
issues with bandwidth which have prevented broadcast quality streaming of multi-channel
video over the “open” internet. In this sense, IPTV is closer in concept and
execution to cable television. Indeed, there has been convergence between the
two in recent years as cable television companies such as Virgin Media in the
UK have added internet video functionality to their set-top boxes[3].

In contrast, what is generally
referred to as “Internet Video” covers all other forms of delivery of video
content over the internet. Such content is delivered over the open internet,
with service providers hosting content on a number of servers which respond
on-demand to multiple concurrent users. The Internet Protocol facilitates this
concurrency and scale through its ability to break up digital audio-visual
streams into multiple packets and deliver it over a network across potentially
different paths, depending on current bottlenecks or outages in the
infrastructure. Though this can present challenges in terms of latency (the
time it takes to deliver data) and the potential loss of individual data
packets, the flexibility and open nature of the network has allowed a
multiplicity of content providers to emerge. And, as broadband speeds have
increased, the possibility of broadcast quality streaming and fast downloads
have increased the viability of paid downloads and subscription businesses for
online video.

Historical Context

It's important to place any
market for online video into the wider context of the home entertainment
market. As mentioned above, the development of IPTV closely mirrors that of
cable television, where small communities – perhaps due to factors such as
geography – are served through a purpose-built network, enabling the provision
of multi-channel video[4]. Cable
and satellite television emerged throughout the 1970s as a method of bringing
television to otherwise inaccessible parts of the US and other countries and
developed into a means of providing extra choice in mature markets served by
traditional broadcast television. Crucial to the salability of such offerings
has been so-called “big ticket” items including major sporting events and major
Hollywood feature films[5]. Cable
television built on the success of home video in providing home access to
feature films and negotiated contracts which introduced an extra exhibition
window closely behind a film's home video release. The growing importance of
the Video-on-Demand market and the relative decline of the DVD market have
ensured that this delay has gradually decreased:

The window used to be several months after video, but as
video has matured from a rental to sell through business, and as the
preponderance of DVD sales has become frontloaded, the residential PPV/VOD
windows has become accelerated ... it would not surprise me by the printing of
this book if the window has crept even further forward.[6]

It has been in the field of
sports coverage that cable and satellite has been most successful in terms of
differentiating offerings from broadcast television and other home
entertainment formats such as video. The ability to offer multiple channels of
live coverage of major sporting events has been a major sales driver. In the
UK, BskyB's development of Premier League football has been an incredible
success and has – in tandem with packages of Hollywood films and premium
television series – driven widespread adoption of Sky's satellite TV platform,
with around 10 million subscribers[7].

Central to the appeal of cable
and satellite has been premium content and a breadth of channels which aims to
ensure that there is always something on television which will engage the
subscriber. Cable television has advanced the notion of fulfilling viewer
desires by introducing true on-demand programming. Leveraging the capability of
fiber-optic networks, cable platforms through the 90s developed to allow
subscribers to select a range of programming for instant viewing. It is this on
demand access to a range of media content which is heavily exploited by
services which are being developed on the internet.

The breadth of sources across
the internet brings the reality of truly on demand content closer, as the
provision of all types of video and other content is only limited by
availability of physical masters and the licenses required ensuring that such
access properly compensates rights holders. The breadth of feature film (and
other types of media content) that has already been digitally mastered for
distribution on physical media formats ensures that the transition to online
distribution is smooth. As with previous home video formats, however, it is legal
issues which may present a greater barrier to the availability of content, as
rights holders seek to maximise value while preserving existing revenue
streams.

Major Companies in the Market Today

Despite the challenges to the
establishment of paid models for online feature film distribution, several
businesses have emerged who are simultaneously exploring new technological
modes of distribution and fulfilling content value demands made by rights
holders. The film industry has followed the music industry, who were first to
respond to large-scale decimation of their business by piracy, to embrace
online distribution as a way of preserving revenue streams. Online music
vendors such as Apple's iTunes and Amazon's MP3 Store have been popular with
music listeners and have provided music labels with at least some of the
revenue lost through illegal downloads. Also contributing to label's revenue
has been subscription services such as Spotify, with a library of music
available for on-demand streaming for a monthly fee. In addition, the music
labels have themselves set up portals on their own websites providing downloads
of albums and individual tracks. Partnerships with mobile phone companies have
also exploited the popularity of music played back on new portable devices[8].

Extending this business model,
iTunes and Amazon have expanded their existing music offerings to offer
downloads of feature film content. Until recently, broadband provision would
have reduced the viability of such services, where file sizes for an average
feature are likely to approach 1 GB. Also experiencing significant growth has
been subscription film services – with Netflix leading the way. The service,
which is currently moving beyond its initial market in the US, has a large
installed base[9],
built on the back its original physical DVD rental service. It has offered a
film streaming service in parallel to DVD rental since 2007 and has recently
introduced streaming-online subscription plans[10].
It has also moved into the content creation sphere, picking up the initial
screening rights for the Kevin Spacey television series House of Cards,
outbidding traditional cable and broadcast rivals in the process.

Despite the global nature of
companies such as Apple and Amazon, offerings such as iTunes have been
prevented from selling certain titles in all of the countries in which they
operate. Complex licensing issues have ensured that download rights have to be
negotiated for each geographical territory. In addition, services providing
access to feature films for streaming or download have had to implement
geo-blocking technology which prevents users from outside of the licensed
territories from accessing content. Online video companies who operate across a
number of countries operate applications and web portals which can look
markedly different, dependent on from which country the user accesses them.
Services such as Mubi – a company which aims to provide access to international
art-house film – implement this by colour coding films on the website menu,
allowing users to filter out those which are not available in their own market.
Others, such as Sony’s Crackle movie portal, filter out content in advance –
which, in the UK at least, results in a very sparsely populated website. It
could be argued that this approach is preferable to the sadly ubiquitous error
message, “This content is not currently available in your territory”, which is
seen on countless online video websites at present, when accessed from the UK[11].

Geographical licensing has
ensured that, while the internet is truly a global platform, each country may
have its own online distribution players. In the UK, the dominant company for
legal access to streaming video content is Lovefilm, which has operated in a
similar fashion to Netflix in the US, providing access to a number of titles
for online streaming alongside a traditional physical DVD rental offering.
Blinkbox is a pure streaming video service, which provides access to a large
number of film and television titles on a pay-per-view basis. It also provides
free, advert-supported access to a limited range of less popular titles. While
both Lovefilm and Blinkbox, in common with international services which operate
in the UK such as iTunes, carry a number of niche and documentary titles, their
main focus is mainstream Hollywood films. A number of specialised websites have
been established in the UK market which provide access to low-budget,
independently-produced feature films, shorts and documentaries. Services such
as ChannelFilms and jointhedocs.tv have partnered with art house DVD labels and
film festivals to provide a legal online source for niche content. Many of
these services are supported by government – such as the now-defunct UK Film
Commission[12]
and the EU’s Europa Film Programme.

[4] See the example of Canby Telecom, in Simpson
& Greenfield, p. 43. The company serves an agricultural community in
Oregon, providing voice, data and "up to 200 standard definition
channels"via an IP network.

[11] Probably a common problem for anyone accessing
from outside the US. Most online video websites are owned and run from the US.
Popular exceptions include dailymotion.com – from France – and youku.com – a
Chinese alternative to Youtube.